Alstom: back to where it began - Switzerland

The information and hyperlinks in the following post were all discovered using OSINT search techniques and by using prepared foreign language ontologies.  Whilst some of the content might be controversial, it is all taken from legal and compliant sources found on the surface-web and deep-web.

One of the gentlemen named in the SFO case against Alstom Network UK is Jean-Daniel Lainé. When at Alstom Mr Lainé was VP of the Chairman's Office from 1998-2003, and then from 2006-2013 he was what Alstom defined as the Group Director for Ethics and Compliance.   Whilst in that role, in fact from April 2005 through to October 2012 he was a designated signatory and director of Alstom Prom, which as stated above became known as Alstom Network  Schweiz AG - the target of the Swiss investigation and subsequent sentencing. The corporate data file on Alstom Schweiz highlights the relevant data (tap in Ctrl-F Lainé here). So at the same time as Alstom was deftly managing "third-party consultants", M.Lainé was one of the company's signatories. On Jan 1st 2006 Mr Lainé was appointed director of Alstom Network UK; a role he held through until June 2013. As the Swiss authorities put it:  "ALSTOM Network Schweiz AG is found guilty of a criminal offense (…) committed during the period between October 2003 and May 2010 through the failure to take all necessary and reasonable organizational precautions to prevent bribery of foreign public officials in Latvia (Plavinas projects), Tunisia (Rades project), and Malaysia (Perlis project)". Thus whatever brand of "compliance" Mr Lainé was in charge of, it was at best lackadaisical, or at worst "cosmetic", and what is more, in his position he should have been aware of this.

This UK investigation is not a stand-alone allegation, but part of a co-ordinated international investigation led (probably) by the US Department of Justice and involving the UK, Swiss, Brazilian and Indian authorities.  At the heart of this global investigation is the allegation that Alstom ran an international bribery network.  The Summary Punishment Order of the Swiss Federal Attorney General sets out some of the evidence collected by investigators over the course of its four year investigation and shows why Alstom Network UK has

Summary Punishment Order page 2, clause 3.

been targeted by the SFO.  Clause 3 of the "Subject Matter" (see page 2) states that in 2000 Alstom centralised the global management and payment of external consultants in to two companies. These two companies were Alstom Network Schweiz AG (previously called Alstom Prom Ltd.) for the power division, and Alstom Network UK for the transport division: both companies were responsible for managing agreements with Alstom's "external consultants".   The Swiss authorities initially accused Alstom Network Schweiz of bribery, but eventually found it guilty of the criminal offense of "failure (…) to prevent bribery of foreign public officials" (see page 10 clause 1).  Thus - as Alstom Schweiz to the power generation division, Alstom Network UK was to the group's transport division, which after the 2015 sale of the power generation business to GE, is all that remains of the group. 

Alstom is also being investigated for bribery by the Brazilian authorities regarding various power and transport contracts.  These documents first surfaced in the Brazilian press back in 2006, and were linked in an article by O Estadao in April 2014 (follow the hyperlink above the exhibit of the first page).  The attached 21 page file comes via the Brazilian daily newspaper from the archives of the Federal Police in Sao Paolo. It is a photocopy of invoices and a contract between Alstom Prom Ltd. Alstom (Switzerland) Ltd  and a "consultant". 

The documents are notionally verifiable because of the stamp on the top-right of each page which reads DELEFIN/DRCORISR/DPF/SP, which stands for Delegation for Repression of Financial Crime and Misappropriation of Public Funds (DELEFIN - part of the Ministry of Justice) and DRCOR, which is the Regional Delegation of Investigation against Organised Crime; DPF stands for Departamento de Policia Federal i.e. the Federal Police; and finally SP - Sao Paolo.  This is about as close to full verification that one ever gets on the internet. (The consultant named in this contract, Luis Geraldo Tourinho Costa was arrested in 2006 for this contract, amongst other things).

If the documents are truly genuine, the paper trail is alarming. Whilst the first page is merely an email asking for an invoice to be paid, pages 2-8 seems to be a copy of a service agreement between Alstom and a Uruguayan "consultant". This consultant is to be paid a fee for "Change Order Amounts" which relate to any increases in the overall contract amount for Alstom's Termo Rio contract (a $600mn dollar contract for Petrobras' Termo Rio thermo-electrical plant in the State of Rio de Janeiro).  Under the terms of the deal the consultant is to be paid up to 6% of the face value of any increase in the overall contract size.  Alstom is notified by the consultant that the contract is increased by $22mn and hence owes $1.1mn of which $550k is billed immediately.  The invoiced party in these documents is Alstom Prom Ltd (aka Alstom Network Schweiz AG) of Brown Boveri Strasse in Baden, Switzerland i.e. the company that was specifically fined and found guilty by the Swiss authorities in 2011. It should be underlined that the invoice is dated 2004, a year before Mr Lainé's arrival; but as both the Swiss and US prosecutors point out, Alstom Network Schweiz never really changed its purpose until the Swiss judiciary pounced in 2011.

The true role of Jean-Daniel Lainé.

As director of both of the "external consultant" hubs (Alstom Network Schweiz and Alstom Network UK) it seems likely that Mr Lainé, as a corporate signatory, carried some notional responsibility for the actions of the company, despite his title as "Head of Ethics & Compliance" and his direct reporting line to the President of Alstom SA. It will be interesting to see what he has to say in court.